2021 Incentive Compensation in Businesses, Part 1

Original program date 8/3/2021

Companies of every type including incentivize compensation features in employee compensation packages. The range of incentive compensation tools and techniques available to these companies depends on the type of entity involved.  Corporate entities have stock options, restricted stock and other forms of profit or capital appreciation rights.  LLCs are even more flexible and can award a variety of forms of profit or capital rights.  These alternatives, together with voting and vesting restrictions, provide companies alternatives for virtually every circumstance.  But each alternative comes with tradeoffs – practical, tax and financial. This program will provide you with a real world guide to the incentive compensation alternatives in business entities.

Day 1

• Framework of incentive compensation alternatives for corporate v. pass-through entity
• Advantages and drawbacks of stock options, restricted stock, and profit participation rights
• How IRC Section 83 impacts corporate stock options, the award of restricted stock and other rights
• Use of vesting to impact the tax consequences of incentive compensation
• Special incentive compensation issues in S Corps

Day 2

• Use of profit interests and capital interest in LLCs, partnerships
• Exchanging incentive compensation for services
• Incentive compensation in single member LLCs
• Impact of IRC Section 409A and deferred compensation
• Employment tax considerations

Note: This material qualifies for self-study credit only. Pursuant to Regulation 15.04.5, a lawyer may receive up to six hours of self-study credit in a reporting year. Self-study programs do not qualify for GAL Certification, ethics, elimination of bias or Kansas credit.